Report: Drug Legalization Would Add $100 Billion to U.S. Budget

Ending the drug war would result in an additional $100 billion annually for the U.S. budget, according to a new report conducted by The Cato Institute.

“Drawing on the most recent available data, this bulletin estimates the fiscal windfall that would be achieved through drug legalization”, states the report. “All told, drug legalization could generate up to $106.7 billion in annual budgetary gains for federal, state, and local governments.” Those gains would come from two primary sources: decreases in drug enforcement spending and increases in tax revenue.

The report estimates that “state and local governments spend $29 billion on drug prohibition annually, while the federal government spends an additional $18 billion.” Meanwhile, “full drug legalization would yield $19 billion in state and local tax revenue and $39 billion in federal tax revenue.

“Legalization can reduce government spending, which saves resources for other uses, and it generates tax revenue that transfers income from drug producers and consumers to public coffers,” Jeffrey Miron, the institute’s Director of Economic Studies, states in the report.